Rising Memory and Storage Costs Threaten the Future of Entry-Level PCs
The landscape of affordable personal computers is undergoing a significant shift as memory and storage prices continue to climb. According to recent analysis from Gartner, a leading technology research firm, the sub-$500 PC market may disappear entirely by 2028. This trend is driven by escalating costs for key components such as DRAM and NAND Flash, which are making it increasingly difficult for manufacturers to offer budget-friendly PCs.
Memory Costs Take a Larger Share of PC Pricing
Historically, memory accounted for a modest portion of a PC’s total bill of materials—about 16% in 2025. However, Gartner projects that by 2028, memory will represent nearly 23% of the total cost. This substantial increase erodes the already slim profit margins on entry-level laptops, making it unsustainable for vendors to continue offering devices in the sub-$500 range.
Ranjit Atwal, Senior Director Analyst at Gartner, explains, “This sharp increase removes vendors' ability to absorb costs, making low-margin entry-level laptops nonviable. Ultimately, we expect the sub-$500 entry-level PC segment will disappear by 2028.” He also notes that the rising prices of AI-enabled PCs will delay their widespread adoption, pushing the projected 50% market penetration of AI PCs to 2028.
Component Price Increases Impact the Entire PC Market
The surge in prices is not limited to memory. Other essential components, including GPUs and storage, have also seen multiple price hikes. Gartner estimates a combined 130% increase in DRAM and NAND Flash pricing by the end of this year, which is expected to drive up overall PC prices by approximately 17% compared to 2025 levels.
As a result, the traditional concept of budget PC builds may become obsolete. Most new PCs are likely to fall into higher price categories, with many models approaching or exceeding the four-figure mark. This shift is expected to steer both consumer and enterprise demand toward premium devices, further shrinking the entry-level segment.
Market Outlook: Fewer Units, Higher Revenues
The consequences of rising component costs extend beyond pricing. Gartner forecasts a 10.4% decline in total PC shipments in 2026 compared to 2025, reflecting both higher prices and reduced availability. Despite the anticipated drop in unit sales, overall revenue for original equipment manufacturers (OEMs) may remain stable or even increase, as average selling prices continue to rise.
The evolving market dynamics suggest a challenging environment for entry-level PC buyers and manufacturers alike. As memory and storage costs continue to climb, the future of affordable computing remains uncertain, with premium devices poised to dominate the market in the coming years.
